Livestock Feeds v. Local Union No. 1634 to Congress of Indus. Workers

• Decision Date: 14 June 1954
• Docket Number: No. 39212,39212
• Citation: 221 Miss. 492,73 So.2d 128,34 LRRM 2433
• Parties: LIVESTOCK FEEDS, Inc. v. LOCAL UNION NO. 1634 OF CONGRESS OF INDUSTRIAL WORKERS.
• Court: Mississippi Supreme Court

Page 128

73 So.2d 128

221 Miss. 492

LIVESTOCK FEEDS, Inc. v. LOCAL UNION NO. 1634 OF CONGRESS OF INDUSTRIAL WORKERS.

No. 39212.

Supreme Court of Mississippi.

June 14, 1954.

Huff & Williams, Meridian, for appellant.

Pyles & Tucker, Jackson, for appellee.

HOLMES, Justice.

This case presents the question of the right of employees under a collective bargaining agreement to vacation pay or a pro-rata thereof, where the employment has been terminated through no fault of the employees. The question is one of first impression in this Court. The facts as disclosed by the evidence and the admissions of the answer are not in substantial dispute.

The appellant is a corporation and operated under the name of Meridian Grain and Elevator Company, Inc., until March 29, 1952, when its corporate name was changed to Livestock Feeds, Inc., by an amendment to its charter. On March 28, 1947, Local Union No. 1634 of the Congress of Industrial Organizations was duly certified as the sole and exclusive bargaining agent of its members who were employees of the appellant. On January 19, 1951, the said union entered into a collective bargaining agreement with the appellant pertaining to wages, hours, and conditions of employment of certain designated employees of the appellant at its plant in Meridian. The agreement recognized the union as the sole and exclusive bargaining agent of such employees with respect to the matter governed by said agreement. Pertinent parts of the articles of the agreement are as follows:

'Article IV--Seniority

'The company shall be the sole and exclusive judge of whom it will hire and in all matters pertaining to lay offs, recalls and promotions, except that where skill and efficiency are relatively equal seniority shall govern in matters pertaining to lay offs, recalls, and promotions. * * *'

'Article VIII--Vacations

'Each employee of the company who shall have not less than one year and not more than five years continuous service with the company prior to June 1, 1951 shall be entitled to one week's paid vacation computed at forty hours per week at regular pay; each employee having had five years or more of continuous service with the company as of June 1, 1951 shall be entitled to two weeks paid vacation computed on a basis of forty hours per week at regular rate of pay. All vacations shall be taken during the months of June, July, August and September and schedule of vacations shall be worked out by the management of the company so as to cause the least interference with normal operations of the mill, however, consistent with the company's needs and as far as reasonably convenient so to do, vacations will be granted at the time requested by an employee. Employees shall notify the company, in writing, not later than May 1st the date said employee's vacation is desired. Final authority and decision as to the time of the granting of such vacation to any employee shall be vested in the company.'

'Article XII--Company Rights

'Nothing in this agreement contained shall be deemed to limit the company in any way in the exercise of the regular and customary functions of management, including the making in connection therewith, from time to time of such rules relating to operations as it shall deem advisable. The Company has and will retain the unquestionable and exclusive right and power to manage the entire operations of the company and direct the work of all employees, including the right to hire, discipline, promote, or transfer its employees, and including the right to suspend, discharge or demote employees for cause, subject to seniority rights of employees as provided in Article IV. The right of the company in its sole discretion to diminish operations and make changes in schedule as circumstances may require is expressly recognized. The number of men to be employed is also at the sole discretion of the company and the fact that certain classifications and rates are established does not mean that the company must employ workmen for any one or all such classifications, or maintain any particular department, unless the company needs such workmen and, in its discretion, needs to maintain a particular department. The management of the company and the direction of the working forces is vested in the company.'

'Article XIV--Effective Date and Termination

'This agreement shall be in force for a period of one year from and after the closing of business on the 19th day of January, 1951, and from year to year thereafter, unless and until written notice is given of desired changes or modifications by either party sixty (60) days prior to the expiration of the term of this agreement or any automatic extension thereof.'

The employees of the appellant entered upon the performance of said agreement, and all who qualified for vacation pay as of June 1, 1951 received such vacation pay and continued in their employment. The union gave timely written notice of its desire to modify and change the said agreement, and entered into negotiations with the appellant for a new contract, beginning January 19, 1952. After several meetings and continued negotiations without reaching an agreement as to the matters covered by said negotiations, the appellant and the union entered into a written agreement dated January 18, 1952, extending the original agreement on a month to month basis not exceeding one year, and providing that either party might terminate the agreement on ten days written notice to the other party. The employees of appellant continued in their employment under the provisions of the agreement, and ten days prior to February 29, 1952, the appellant gave the union written notice to terminate the agreement and on said date, discontinued their business and ceased operations, thereby terminating the employment of its employees who were covered by said agreement.

Upon the termination of the employment of said employees the union made demand upon the appellant for vacation pay for said employees claimed to have been earned subsequent to June 1, 1951. This demand was refused and the union then requested that the matter be submitted to arbitration as provided for in the agreement and this request was likewise refused. The union, acting through James Wilson, its secretary and treasurer, Joined in individually by the said James Wilson, then brought this suit against the appellant in the Chancery Court of Lauderdale County, seeking to recover for the benefit of said employees vacation pay alleged to have been earned for the period subsequent to June 1, 1951. The appellant answered, denying liability and incorporated in its answer a demurrer to the original bill upon the ground that there was no equity on the face of the bill. The demurrer was heard separately and overruled, and the case proceeded to a hearing on the merits. At the conclusion of the hearing, the chancellor found from the evidence that 61 of the employees of the appellant were qualified for vacation pay and were entitled to a pro-rata or proportionate part of their vacation pay on the basis that from June 1, 1951, to February 29, 1952, the date appellant ceased business, and employees had earned and were entitled to receive 9/12 or 3/4 of their annual vacation pay. Accordingly, the chancellor awarded a decree against the appellant for $2,248.20, plus interest at the rate of 6% per annum from March 1, 1952, and appointed a trustee to receive the funds and disburse them, and required the appellant to furnish the trustee information requisite to determining the names and addresses of the employees and the amount to which each would be entitled under the court's decree. From the chancellor's decree, the appellant prosecutes this appeal.

The question of the right of the union to bring this suit and the contention of the appellant in its brief that any award made should have been in favor of individual employees have been eliminated from consideration by a stipulation of the parties.

The conclusion which we have reached renders it necessary that we deal only with the appellant's contentions that the court erred in overruling the demurrer to the original bill and erred in overruling appellant's motion to exclude the evidence and render a decree for the appellant, and we consider both such contentions together.

It is the position of the appellant that the collective bargaining agreement controls; that it made no provision for pro-rata vacation pay where the employment was terminated prior to the eligibility date for vacations through no fault of the employer; that the continuous employment for each employee to June 1, 1952 was a condition precedent to vacation pay and that this condition was not met. It is further the position of the appellant that the Union terminated the original agreement dated January 19, 1951, and entered into a new agreement dated January 18, 1952, and that in no event would the employees be entitled to pro-rata vacation pay other than for the period from January 18, 1952 to February 29, 1952, the date appellant ceased business.

We are of the opinion that the record does not support the contention that the original collective bargaining agreement was terminated by the union. By mutual agreement, that contract was continued in force except for the modification that it was to continue in force from month to month, subject to the right of either party to terminate it on ten days written notice to the other party. It is our view that if the employees are entitled to vacation pay they are entitled to it pro-rata for the period from June 1, 1951 to February 29, 1952.

We agree with the appellant that the rights of the employees to vacation pay are to be measured by the provisions of the collective bargaining agreement. In deciding the question presented it becomes appropriate, therefore, to consider the rules of construction applicable to such agreements, and the purposes for which such agreements are made, and the...